Why Bridging Loans Are Best in a Crisis

Business loans in Canada are an important way to fund your startup business. These types of loans are usually provided through banks or other lending institutions. As you may know, the business environment in Canada has become very competitive due…

What makes a bridging loan the best possible funding solution in a crisis?

The answer, of course, depends on how you define a crisis in the first place.

In the private borrowing sphere, it could be that you’ve run into difficulties repaying your mortgage and would prefer to avoid repossession. You need to source the money to pay off your remaining mortgage as quickly as possible, in order to then sell your home, repay the loan and keep any additional proceeds raised.

bridging loan

It could also simply be that you’ve found the home of your dreams at an unbeatable price, but the sale on your existing property is still pending.

On the business end, a crisis scenario could include funding urgent repairs and building works, paying an unexpected tax bill or tiding employee payroll over while you’re waiting for invoices to clear. In all instances, time is a factor.

Just a few of the endless bridging loan examples where fast-access funding can be a real lifeline. But what is it about bridging loans that makes them so suitable for crisis situations? Why should a bridging loan be the first choice for anyone dealing with an unexpected and urgent financial issue?

The Application Is Straightforward

For one thing, bridging loan applications are comparatively straightforward.  After exploring the options with an online bridging loan repayment calculator, it’s simply a case of contacting a leading broker and having them compare the market on your behalf. You’re not expected to jump through hoops, or provide a complete account of your life history to date. Just as long as you’re able to provide sufficient collateral to cover the value of the loan, you’re almost guaranteed to be accepted. Far quicker and easier than applying for a traditional loan or mortgage product.

Extensive Supplementary Evidence Is Unnecessary

More often than not, the only evidence bridging lenders require is that of the collateral you intend to use to secure the loan. In which case, nothing else matters. Your financial status and history are inconsequential, as is your current income level. Along with simplifying the application for the borrower, this also streamlines and accelerates processing on the part of the lender. All of which adds up to a far quicker and easier experience when time is a pressing issue.

Your Credit Report Won’t Hold You Back

Bridging loans are rare examples of flexible and affordable credit facilities where your credit report won’t necessarily hold you back. While some bridging lenders continue to factor credit scores into their decision-making processes, the vast majority aren’t interested in your credit history. Once again, the only thing that matters is the applicant’s ability to provide sufficient collateral to cover the loan. Applicants with poor credit or no credit history whatsoever aren’t necessarily counted out of the running.

The Funds Can be Accessed Within Days

Perhaps most importantly of all, funds made available by way of a bridging loan can be accessed within a matter of days. From the moment the application is submitted, it can take as little as five working days for the whole thing to be processed and completed. There are few (if any) comparable lending facilities on the market that can get the job done quite as quickly as a bridging loan.  Hence, when delays and complications need to be eliminated from the equation, there’s no better option than a bridging loan.

There Are Comparatively Few Restrictions

Last but not least, bridging loans are issued subject to comparatively few restrictions. For example, a bridging loan can be used for absolutely any legal purpose whatsoever. In addition, there are no upper limits to how much can be borrowed at any one time. Once again, it all comes down to the value of the assets the applicant uses to secure the loan. Unlike more traditional loan applications, the lender is unlikely to have any interest in your intentions for the loan – just as long as they are legitimate.

bridging loan




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